|Globalization has expanded transnational consumption networks and made
labour processes increasingly informal, transforming the very nature of
work. Globally, formal employment is shrinking. The urban informal sector
grew twice as fast as the organized sector in the 1980s. In South Asia,
which contains nearly 20% of the world labour force, more than 90% is in
the informal sector. Large employers and even public sector enterprises,
many having banned recruitment for regular employment decades ago, employ
casual and contract workers (Cf. Chowdhury 1996). The rediscovery of the
informal sector and the renewed management emphasis on keeping labour informal,
on contract, on an independent, free-lance, or house-hold basis, or in
an otherwise unregulated and unprotected condition, challenges the ability
of trade unions to organize and to represent labour. Organized labour finds
itself in the midst of a historic economic challenge. Not only does it
suffer from the general crisis of legitimacy in the conventional organizations
and associations of modern political life. It has also been shaken from
its foundations in an increasingly informal economy.
The relatively small portion of the labour force in developing countries
that is organized has been repeatedly characterized as economically elitist,
politically conservative, aristocratic and unrepresentative. The view that
organized labour is a privileged sector runs from accomplished Marxists
(Lenin 1975) to modern labour and contemporary social theorists (Arrighi
and Saul 1968, Omvedt 1993). Indian trade unionists acknowledge having
once ignored the vast informal sector. As All India Trade Union Congress
President E. Balanandan puts it, the informal sector was viewed as residing
"on the fringes of its parent, the robust organised sector." Comrade Balanandan
reflects common sentiments among South Asian trade union leaders: The informal
sector, based on "low working capital, cheap labour and scuttling of all
labour laws... now threaten[s] the very existence... of the organized sector."
Trade unions "must work more systematically to organise the workers in
the unorganised sector and bring them into the common struggle, which will
give a new turn to the trade union movement in the country" (Balanandan
This essay covers diverse terrain to gain a wider perspective on the
economic transformations facing trade unions in South Asia and the organizational
and strategic transformations they have effected. We look specifically
at India and Pakistan, the countries of the region with the largest economies
and largest labour forces. Focusing on two specific issues trade union
relationships with political parties and workers' representation in trade
unions two distinct historical trajectories emerge. An impressive labour
movement based on political unionism developed in India. An assertive but
repressed workers' movement took shape in Pakistan. The chief theoretical
contribution formed in this comparative historical analysis is that social
movements and institutions, regardless of their near complete neglect by
conventional political economy studies, are key forces in economic reform.
The next section assesses the ability of each labour movement to resist
the current neo-liberal economic reforms. We trace the nature of trade
union power to the structure of labour institutions fashioned by past political
regimes. Finally, we examine trade union responses to structural economic
changes and new economic policies. We draw from a debate within the Indian
trade union movement concerning the limitations of political unionism and
new union strategies. We note the apparent limitations of political unionism
and suggest that a new unionism, with wider networks among other social
organizations and deeper roots in community, will also include a new political
Indian and Pakistani Trade Union Development
The newly independent states of India and Pakistan inherited identical
colonial labour legislation, but the working classes and their organizations
were afforded markedly different roles. The Indian National Congress, which
dominated the independence movement and parliaments in independent India,
maintained a strong concern for labour from at least 1920 with the founding
of the All India Trade Union Congress (AITUC). The All India Muslim League,
the party that successfully petitioned for the creation of Pakistan, had
no such concern for labour and did not develop relations with organized
labour in its campaign for Pakistan.
India and Pakistan exhibit the stark contrasts in regime type and in
development ideology that is rarely seen between neighboring countries,
excepting those created by partition. Pakistan, claiming to be the national
right of South Asian Muslims gave way to decades of military rule soon
after its creation in 1947. India maintained a competitive electoral democracy
which predates Independence. Similarly, India and Pakistan adopted markedly
different development strategies. Indian planners were inspired by Fabian
socialism and Soviet industrial achievements and followed an import substitution
strategy for economic development that was politically buttressed by socialist
rhetoric. Pakistani planners, in contrast, had no firm ideological moorings
and were persuaded by American advisors in the 1950s to adopt a more export-oriented
development strategy and an economic doctrine of "functional inequality."
Economic development was to be fueled by the concentration of private capital.
The impact of their divergent economic ideologies is particularly evident
in the field of state-labour relations. Both countries inherited identical
regimes of labour legislation. A few pieces of colonial labour legislation,
provided the basic structure of the Indian and Pakistani labour regimes
for twenty years after independence. These are the Trade Union Act, 1926,
the Industrial Employment (Standing Orders) Act, 1946 and the Industrial
Disputes Act, 1947. The Industrial Disputes Act, 1947, for example, establishes
permanent administrative machinery for the settlement of labour disputes,
laying down deadlines for specific stages of consultation and arbitration,
requires employers to recognize and to negotiate with trade unions, prohibits
strikes and lock-outs during pending conciliation, and provides that industrial
disputes in public services be settled by compulsory arbitration.
But military governments in Pakistan rewrote the colonial era labour
legislation and restructured the labour institutions. The Yahya Khan government
ensured that the trade union movement would be weak, factory-based, and
politically fragmented. The state promoted trade union multiplicity and
restricted the trade unions' national political participation.
None of Pakistan's political parties have evidenced interest in incorporating
labour. India's elected governments encouraged the development of politically
powerful trade unions which could serve as electoral vehicles for the major
political parties. The participation of industrial labour in the independence
struggle secured an institutional role for organized labour in Indian politics.
A brief review of Indian and Pakistani labour history bears this out (Cf.
As a response to the creation of the International Labour Organisation
in 1919, the All India Trade Union Congress (AITUC) was founded in 1920.
Leaders of the Indian National Congress and other nationalist parties played
an important role in the development of AITUC. Jawaharlal Nehru, India's
first and longest standing Prime Minister, served as AITUC President, as
did nationalist leaders of a variety of political persuasions. The Indian
National Congress, which dominated the independence movement, and the Communist
Party of India maintained a strong concern for labour. Mohandas Gandhi's
strategy of moral resistance to colonial rule, leading to the formation
of the Ahmedabad Textile Labour Association in 1920, gave ideological impetus
to a tradition of trade unionism that eschewed class struggle and confrontation.
Just prior to independence in 1947, the Congress created its own party-based
trade union organization. After independence other political parties, as
they gained national standing, sponsored their own trade union wings. When
parties split, as did the Communist Party of India in 1964, new trade union
organizations were established, as was the Centre for Indian Trade Unions
(CITU) in 1970. One of the newer centers, the Bharatiya Mazdoor Sangh (BMS),
tied to the Hindu nationalist Bharatiya Janata Party (BJP) and the Rashtriya
Swayamsevak Sangh (RSS), may be the fastest growing trade union center
Each major political party maintains a trade union wing, or in Indian
parlance, a "centre." Between some trade union centers and political parties
particularly on the left, where the organization of working classes is
an integral component of the party's program there is a regular exchange
of officials. The current Indian Home Minister Inderjit Gupta, for example,
rose from General Secretary of the Communist Party of India's All India
Trade Union Congress to become the General Secretary of the Communist Party
of India. Even officials of the centrist Indian National Trade Union Congress
occupy seats in Parliament and in state legislative assemblies. All trade
unions claim to be autonomous from their party affiliates yet some support
party candidates and use trade union channels for electoral advancement.
The weekly newspaper of INTUC, for example, the Indian Worker, prints
election material proclaiming that only the Congress can protect the working
class. The trade union centers serve as vehicles for successful organizers
to become political leaders (Cf. Chandra Das 1990 on Orissa) Fifty-two
parliamentary seats, nearly ten percent of the Lok Sabha, the lower house
of the Indian Parliament, were once considered to be labour constituencies,
where political parties vie for candidates among trade union leaders (Mathur
1991). One such trade unionist, V. V. Giri, rose to become Minister of
Labour and then President of India.
Presently, there are ten major trade union centers in India, each affiliated
in some manner to a political party.
As labour occupied no significant part of the imagination of the All
India Muslim League, Pakistan's post-independence economic development
strategy gave virtually no attention to labour, except as an industrial
input to be drawn from rural areas at subsistence wages. Labour was to
assume the role specified by Sir Arthur Lewis in his neoclassical model
of economic growth. The Essential Services Maintenance Act, 1952 is representative
of Pakistani labour law. The law prohibits unions and makes absence from
or stoppage of work an imprisonable offense in any industry or service
designated by the government at any time as "essential to the life of the
community" (GoP 1952). It applies today to employees in the banking and
finance, broadcasting, post, and telecommunication services, and in the
railways and defense industries, a violation of ILO Conventions 89 and
96 repeatedly cited by the ILO.
Repressed and politically disincorporated, the Pakistani trade union
movement has nevertheless been influential as a social movement at key
phases in Pakistan's political development. In March 1969, popular unrest,
in which students, new professional classes, and factory workers played
the dominant role, brought an end to General Ayub Khan's decade of martial
rule and brought elections for a new Constitutional assembly (Cf. Ahmed
1974). In response to the political challenge of organized labour, the
interim military government, having entrusted itself with the supervision
of elections, quickly devised a new labour policy to depoliticize labour.
The policy, promulgated as the Industrial Relations Ordinance of 1969 (IRO),
was designed by Deputy Martial Law Administrator Noor Khan. The IRO gave
industrial workers the fundamental rights for which they had agitated:
the right to form trade unions, the right to collective bargaining, and
the right to strike. At the same time, the Ordinance effectively prohibited
industry-wide or nation-wide unions. The Ordinance required that 75% of
the members of any trade union declare the same employer. But as large
nation-wide enterprises, such as the railways and post, are deemed by the
government as essential industries and services, unions may not form in
such enterprises. The IRO instituted enterprise unionism in Pakistan.
Noor Khan's inspiration was his experience in Pakistan International
Airlines (PIA), the very successful, military owned and operated national
airline. (N. Khan 1995) When he assumed control of PIA in 1959, standard
procedure was to imprison workers who attempted to form unions. Noor Khan
decided that PIA would run better if these workers were released from jail,
brought back to PIA, and permitted to form a union, provided that their
union could be insulated from lawyers, social activists, politicians, and
professional trade unionists, so called "outsiders." Workers were required
to represent themselves. The IRO extended the PIA politically insulated
enterprise union model to the entire country through a Collective Bargaining
Agent (CBA) system. Federations of unions were permitted, but the selection
of trade union leaders and the conduct of collective bargaining was restricted
to the factory-level. The CBA system requires that trade unions win a secret
ballot election in order to obtain the exclusive right to negotiate with
management and to take industrial action.
Serial data on trade union and trade union membership growth in India
and Pakistan suggest that the Industrial Relations Ordinance 1969 did have
a powerful influence on the structure of trade unionism in Pakistan. As
a result of Air Marshal Noor Khan's 1969 labour policy, the number of trade
unions almost doubled within a year (Figure 1). As trade union membership
grew steadily, the rapid multiplication of trade unions led to a rapid
decline in membership density. The Industrial Relations Ordinance 1969,
was amended by Prime Minister Zulfikar Ali Bhutto in 1976 with the intention
of stopping further multiplication of trade unions. Like the IRO, the effects
of the 1976 amendment is reflected in membership statistics. Moreover,
statistics on industrial disputes (Figure 2) suggest that the fragmentation
of organized labour in Pakistan effected by the CBA system helped to quell
In India, neither the number of unions nor membership density underwent
dramatic change in the late 1960s or early 1970s (Figure 3). In India,
we do not find a dramatic decline in industrial disputes in the early 1970s
(Figure 4), although Indian trade unionists report that trade unions began
to suffer a gradual decline in their collective bargaining power in the
mid-1970s. Rather, we see a steady rise in the number of workdays lost
and number of workers involved in industrial disputes until the early 1980s.
This decline in industrial disputes in the early 1980s reflects the success
of managerial production and employment strategies, the point of departure
for the next section.
Industrial Restructuring and Trade Union Response
Both India and Pakistan are undergoing International Monetary Fund structural
adjustment. One of the essential conditionalities of IMF structural adjustment
in both countries is public sector privatization. Political conflicts over
privatization often reveal patterns of influence between agencies of the
state and social institutions. Like Peter Gourevitch's "hard times," privatization
in India and Pakistan "expose(s) strengths and weaknesses to scrutiny,
allowing observers to see relationships which are often blurred" (1986:
9). Here we briefly examine the experiences with privatization in India
and Pakistan to better illustrate the relationship between labour and the
state in India and Pakistan.
The Government of India announced in June 1991 that unprofitable public
sector enterprises would within three years no longer be able to rely on
government subsidies to make up losses. Unprofitable enterprises were to
be privatized. More than five years later, the central government has not
completed the privatization of any of its 248 enterprises. The government
has sold shares in public sector units, but most of these shares have gone
to government financial institutions, effectively transferring public debt
from public sector industry to public sector financial institutions. Only
31 public sector enterprises have been subject to any disinvestment, and
these only at an average of 8% of equity.
In Pakistan, privatization has been anything but cautious. Rather than
gradually disinvesting shares, the Pakistan government arranged for the
wholesale liquidation of the public sector. As soon as Nawaz Sharif became
Prime Minister in October 1990, he announced that his government would
move rapidly to privatize the public sector and to deregulate private industry.
Sharif declared that Pakistan's privatization program would be a model
for the entire Muslim world and would rival anything that Margaret Thatcher
could achieve (Economic Review 1992). Sharif's Disinvestment and Deregulation
Committee, now the Privatisation Commission, recommended that the government
altogether "retire from the production of industrial goods" (World Bank
1993: 49) and approved nearly all central government enterprises for privatization.
These included all manufacturing enterprises, all the nationalized banks,
and such public sector giants as the Pakistan Telecommunications Corporation.
In the five years since the Privatization Commission was established, much
of the Pakistani public sector has been sold to private investors.
Unions in both countries have organized national and local strikes,
public demonstrations, court challenges, and various local agitations.
Neither movement has been weak on the streets. But in India, protests have
lead to reversals of government privatization decisions and to a series
of tripartite negotiations to manage industrial restructuring by sector.
Tripartite negotiations were begun in December 1991 under the auspices
of the Prime Minister's office (Cf. ILO 1992, Mathur 1992). In Pakistan,
these protests sometimes quite militant and prolonged have led to plant
level union-government agreements on industrial restructuring. The Government
of Pakistan has privatized dozens of public sector enterprises, from tractor
factories to large commercial banks.
Pakistan's enterprise based trade unions negotiated an agreement with
the government that smoothed the way for privatization. Pakistani trade
unionists in 115 public sector units scheduled for privatization formed
the All Pakistan State Enterprises Workers' Action Committee (APSEWAC)
in 1990. APSEWAC was able to negotiate an agreement with the federal government
that gives workers of privatizing enterprises the options of retaining
their jobs for at least one year after privatization, retiring with a pension
amounting to four months' salary for every year worked, or purchasing the
enterprise using retirement funds and bank loans (APSEWAC 1990). Workers'
representatives formulated business plans for units in the manufacture
of cement, chemicals, and transport equipment (Yaqoob 1992). Presently,
nine of the sixty three industrial and financial concerns that have been
privatized are now owned and, in some cases, managed by employee groups
(A. R. Khan 1995). When the privatization of Pakistan's entire power sector
was threatened by the refusal of 800 workers to allow foreign investors
to inspect the Kot Addu power plant, the government's agreement to use
the APSEWAC agreement as a base for negotiations with the workers resolved
the seven month stand-off (Ahmed 1995).
The Government of India, on the other hand, has not been able to privatize
a single central public sector unit. The government's failure to privatize
the Indian Iron and Steel Company clearly demonstrates the strength of
political unionism labour in India. As the Steel Authority of India Ltd.
(SAIL), under the financial constraints of a tighter government budget,
was unable finance the modernization of IISCO, the government, in a cabinet
meeting in November 1993, decided that IISCO should be privatized. The
Communist Party of India-Marxist (CPM) government of West Bengal, where
IISCO is located, supported the move. The government invited bids and accepted
that of an Indian industrialist.
The 30,000 workers at the Burnpur-based unit strenuously objected to
the privatization plan. INTUC, the CPM's chief rival in West Bengal, together
with other centers, organized a "lightning strike to oppose the decision"
(The Statesman 1993) The unions managed not only to stage a strike throughout
the entire public steel sector but also to gain the support of officers
associations. A Parliamentary committee, convened to review the privatization
decision, recommended that the decision be withdrawn and that SAIL be given
the necessary budgetary support to finance IISCO's modernization. The government,
despite the Congress Party's majority in the chamber, withdrew from the
Lok Sabha the bill which would have effected the privatization of IISCO.
The reversal of the government's decision to privatize the giant public
sector enterprise demonstrates the ability of politically affiliated unions,
when they are united across party lines and when they form strategic alliances
with opposition political parties, to oppose government privatization efforts.
Labour opposition in India has not been restricted to the traditional
mechanisms of strike actions and negotiations. Labour agitations have also
employed some unusual and ingenious strategies. The Bombay workers of Hindustan
Lever, an Indian subsidiary of the giant Anglo-Dutch multinational Unilever,
locked out of their factory, produced their own washing detergent powder
under the brand name Lock-Out. Selling 110 tons of the powder won the union
considerable public attention. Continuing the innovative strategy, the
Hindustan Lever Employees' Union runs parallel annual general shareholders'
meetings so as to inform investors of various management and financial
irregularities (Setalvad 1992: 99-100). In August 1992, cotton textile
mill workers from central Bombay marched through the streets in underpants
and undershirts denouncing India's independence and commitment to eradicate
poverty as a sham (Bakshi 1992).
The Indian trade union centers have also been able to obstruct reform
of labour legislation envisioned in the IMF structural adjustment program.
One of the most contentious issues in India's labour reform process is
the fate of the Industrial Disputes Act, 1947 (IDA). Section 25 of the
IDA, originally an ordinance under Mrs. Gandhi's emergency government in
1976, requires government permission before large scale lay-offs. International
financial institutions and foreign aid agencies have applied intense pressure
on the central government for an amendment of the IDA so that employers
may terminate employees at their discretion. The adoption of this so-called
"exit policy" has been effectively opposed by the trade union centers.
Although the ability of trade union centers to block a major component
of the reform program is an important measure of Indian trade union power,
some trade unionists privately admit that opposition to the exit policy
may have been unwise. Employers have been able to dispense with excess
labour through lock-outs, voluntary retirement schemes, sub-contracting,
and other means (Shrouti 1994). The absence of a legal mechanism for the
closure of industry has prevented workers from receiving compensation or
retraining. Indian trade unions have been able to halt privatization in
the public sector and to obstruct labour law reform, but face an altogether
different challenge in the increasing informalization of employment and
deregulation of the labour market.
Despite the obvious advantages of political unionism in obstructing
economic policies, conventional trade unionism has been roundly criticized
for representing chiefly formal sector workers, being largely concerned
with wage gains, and seeking to have influence only through political parties.
Perry Anderson (1967) outlined the major limitations of trade unionism,
tracing these to the nature of labour's relationship to capital. The contention
that political unionism fails to adequately respond to the deep changes
that have been occurring in modern economies, societies, and cultures is
now commonplace even among trade union centers.
Ironically, the principal source of the political strength of the Indian
trade union movement its relationship to the major political parties
is also its principal source of shopfloor weakness. The close ties between
Indian trade union centers and the major political parties have made the
unions dependent upon political party priorities and rivalries. Scholarship
on trade unions in India has argued that the Indian unions are politically
weaker than their European counterparts because there are too many of them.
Lloyd Rudolph and Susanne Hoeber Rudolph refer to this as "involuted pluralism"
(1987: 259-289), adapting Clifford Geertz's concept of "agricultural involution"
(1963) to emphasize that excessive multiplicity has weakened the trade
union movement. Indian trade union multiplicity certainly complicates labour-management
negotiations and can often be exploited by management. But the weakness
of Indian trade unions is a consequence of trade union dependency upon
political parties, of which multiplicity is only a symptom. In Pakistan
too more than a dozen unions might be active in a single enterprise. However,
Pakistan's collective bargaining agent (CBA) system requires management
to negotiate with only one, thus regulating shopfloor political rivalry.
While the Indian trade union centers have been powerful in obstructing
official national-level privatization, they are socially weak. Privately,
trade union officials admit that union membership rates have dropped. Publicly,
social activists and representatives of non-governmental organizations
complain that trade union officials are uncooperative and bureaucratic.
This is a reflection of the cost of labour's incorporation by political
One of the strongest indications of the frustration with political unionism
was the Bombay textile strike, the world's largest industrial action, as
measured either by the number of workers involved or by the number of workdays
lost. One of the chief demands of the striking workers was the derecognition
of the INTUC affiliated Rashtriya Mill Mazdoor Sangh (National Mill Workers'
Union). Under the corporatist Bombay Industrial Relations Act (BIR) of
1946, a single trade union is recognized for the cotton, woolen, and silk
textile industries. Since 1946, the Congress-affiliated Rashtriya Mill
Mazdoor Sangh (RMMS) has been the sole recognized union for 60 mills in
Bombay and Gujarat (Naik 1992). Textile workers regard the RMMS as an instrument
of management not as a union that represents textile workers (Cf. van Wersch
1992). Workers were so determined to strike against the RMMS that they
enlisted the independent Dr. Datta Samant to lead to the strike (Samant
1993). Samant was uncompromising, as were the millowners. As a result,
at least 100,000 workers lost their jobs (Bakshi 1992) and the strike has
yet to be called off. Most of the textile workers moved to poorly paid
and unregulated informal work in powerloom sheds. The struggle for independent
unionism in the Bombay textile industry suggests that the power of political
unionism may be purchased at a rather high price.
Political unionism is increasingly viewed by labour organizers, even
within the Indian trade union centers, as a hindrance to their social relevance.
In West Bengal, the Communist Party of India-Marxist (CPI-M) government
has privatized industry and retrenched labour and the otherwise firebrand
Centre for Indian Trade Unions (CITU) has largely conceded (Nagarik Manch
1991). Even trade union officials in the political unions acknowledge that
Indian trade unionism is hobbled by a dependent relationship to political
parties. One senior INTUC official suggests that the best thing that the
Indian trade union centers could do for the Indian labour movement would
be to disband (Mazumdar 1991).
The costs of incorporation may also be gauged by the importance which
Indian trade union centers assign to workers' management schemes as mechanism
for preserving employment in an era of industrial restructuring. The lack
of serious consideration and little more than rhetorical support given
to workers' management schemes in India is an indication that the incorporation
of the Indian trade unions has come at a cost. Indian trade union centers
are not supportive of workers management schemes, although workers, anxious
to retain their jobs, are. The interest with which Pakistani workers have
pursued workers' management stands in stark contrast to the indifference
of Indian trade union officialdom. Pakistan trade unionists, who act more
often as the leaders of a factory based community than as the officials
of a quasi-governmental agency are often quite aggressive in pursuing workers'
shopfloor concerns (Cf. Shaheed 1977).
Developing New Trade Union Strategies
Indian and Pakistani workers and labour organizers have been devising
new trade union strategies for decades. Recently, emphasis has been on
advancing trade union solidarity, independence, and democracy, organizing
informal sector workers, and promoting workers' ownership and management
plans and labour education programs. The broad contours of these emergent
strategies can only be suggested here.
At the national level, India's trade union centers have made significant
moves in self-transformation. Two of the largest trade union centers, the
All Indian Trade Union Congress (AITUC) and the Congress Indian National
Trade Union Congress (INTUC), have taken initiatives to "delink themselves
from their parent political organisations." (Mani 1995) An even more significant
development is the merger of the Hind Mazdoor Sabha (HMS) and AITUC, which
will be complete in 1997. Perhaps the most significant development for
trade union independence and democratization as well as for organization
of the informal sector is the formation of the National Centre for Labour
in May 1995. Made up of nearly two dozen labour unions, it is the only
national trade union federation that aims to organize and represent informal
sector workers. The National Centre for Labour (NCL) maintains its independence
from political parties. The NCL represents nearly 600,000 workers in industries
ranging from embroidery, to fish, forest, and construction work. Years
of careful planning for the organization of the NCL forged a shared perception
that "different sections of the working class[es]" should engage in "education
and information sharing" and joint "lobbying and interaction [with]...
government and its regulatory agencies." (Mani 1995: 2486) The formation
of the NCL gives evidence of the resilience and responsiveness of labour
to the economic and political challenges facing organized labour.
One of the members of the National Centre for Labour (NCL) is the well-known
Self-Employed Women's Association (SEWA). SEWA has a membership of 220,000
women, in block printing, silk screening, garment stitching, and embroidery,
23,000 of whom work at home (Bhatt 1996). SEWA led a successful campaign
for the adoption of an International Labour Organisation (ILO) Convention
on Home-based Workers. Discussions in the ILO raised understanding about
the limited protections to this large and growing segment of the informal
sector. The implementation of the ILO Home Work Convention will promote
the equal treatment and legal protection of home-based informal sector
Another front within Indian trade unionism has pressed for "the creation
of worker cooperatives [as] an alternative form of ownership and control
over production" (Thankappan 1996). The movement of plant based trade unionists
pursuing workers' management has grown in response to the widespread problem
of mismanagement in the private sector. Outstanding credit tied up in sick
industries in the private sector was estimated at over US$3 billion in
1989 and was expanding at a rate of over 18% per annum (Goswami 1993: 3).
The majority of these industries are unprofitable due to mismanagement
Kamani Tubes Ltd. in Bombay, manufacturer of metal tubes, is the most
celebrated workers' management experiment in India. Company performance
at privately owned and operated Kamani Tubes began to decline in 1975.
"Internecine feuds and litigation among Kamani family members" and "imprudent
and undesirable management practices" made the enterprise unprofitable
(GoI 1991). The Industrial Development Bank of India and a national bank
devised refinancing and rehabilitation schemes, giving the company fresh
capital. Still, Kamani management was unsatisfactory. In 1987, the Kamani
Employees Union won a Supreme Court judgment referring the company to the
Board for Industrial and Financial Reconstruction. The union devised a
plan to cut the labour force and finance operations through reductions
in salaries and use of provident funds. The worker managed company became
profitable within two years of operation.
The success of the workers' management experiment at Kamani Tubes led
to the formation of the Centre for Workers' Management and to five other
successful workers' management operations. Each of these worker-managed
manufacturing industries is the result of the workers' struggle to keep
a mismanaged private sector enterprise viable. It is curious, given the
prevalence of cooperatives in Indian agriculture, that workers' cooperatives
in India are rare and given little but rhetorical support by the government
and by official trade union centers. The CWM aims to reverse this tendency
by giving management education to labour organizers, developing techniques
to monitor the financial performance of enterprises, and facilitating the
development and adoption of rehabilitation schemes for sick companies.
Advocates for workers' management solutions to sickness in Indian industry
continue a long tradition of exposing private and public sector mismanagement.
Together with other labour organizers, they argue that as privatization
is a method for improving efficiency, not an end in itself, then increased
managerial autonomy and new forms of ownership are required. Major business
groups are managed privately, without day to day interference by government
agencies, despite the fact the government often owns the majority of the
assets in their industries. In the public sector, however, the government
often fails to appoint directors for long periods and important production
and marketing decisions are not made with due consideration to long-term
viability. Workers have demonstrated unique perspectives on management
and incentives for industrial competitiveness. By force of the new economic
policies and accompanying industrial restructuring, Indian trade unions
have stepped up their surveillance of company corruption and mismanagement,
in the private sector and in the public sector. Trade unions have raised
concern in national economic policy debates that the public sector is being
treated by some as the private domain of select civil servants, politicians,
and businesspeople. The workers' management movement is to a large degree
an expression of workers' commitment to responsible industrial development.
The experience of one trade unionist, the President of one of two representative
unions at a giant Indian public sector unit, suggests the journey that
unionists have had to undertaken. Bharat Electronics Limited was disinvested
of more than 20% in 1991 in India's first round of public sector disinvestments
and another 5% in 1995. Comrade Matthew, the President of the All India
Trade Union Congress (AITUC), was elected over the official candidate of
the Communist Party of India, to which AITUC is affiliated. Workers in
Karnataka and especially in the Bangalore public sector, where Bharat Electronics
is located, have a reputation for preferring the representation of politically
unaffiliated leaders over affiliated leaders. Under Comrade Matthew's leadership,
the union won a Karnataka High Court case against further privatization
on the grounds that the management had not formulated a business plan that
demonstrated the need for or the advantage of further disinvestment. The
court held that until the central government could show such a plan, it
could not initiate further disinvestment.
Employees have also proposed a share-holding plan, under consideration
by the high court. This gives evidence of the commitment of the workers
to industrial restructuring and market competitiveness. Comrade Matthew
argues that the enterprise needs to try "new forms of ownership and management"
and to be "receptive to collaboration between publics sector units and
multinational corporations" (Matthew 1996). The willingness of the labour
leader and of the workers whom he represents to accommodate to the demands
of the market reflects the commitment of Indian industrial workers generally
to do what is necessary to save their enterprises and their jobs.
One of the challenges these unions face is to demonstrate to government
that they have not only the organizational strength and determination to
organize strikes and political protests but that they also have the ability
to discuss and negotiate credible industrial rehabilitation programs. Indian
trade union centers are meeting that challenge in a series of special tripartite
industrial rehabilitation commissions. Indian trade union centers are negotiating
with government the rehabilitation of the cotton textile, jute, chemical,
engineering, electricity generation and distribution, and road transport
Pakistani trade unionists have also been active in developing new union
strategies. New varieties of union strategies are emerging in Pakistan,
involving inter-federation cooperation, trade union-community alliances,
support for workers' ownership and management schemes, and a renewed emphasis
on workers' education.
At the national level, the most significant recent development in Pakistan
trade unionism was the March 1995 formation of the Pakistan Workers' Confederation.
The Pakistan Workers' Confederation (PWC) has coordinated protests across
the country against wage compression, rising prices, unemployment, the
contract labour system, industrial closures, and under-utilization of capacity.
The merger is explained by the six participating federations as necessitated
by the deep economic, political, and social crisis in which feudalism,
corruption, nepotism, and lawlessness have reached historic heights. One
of the PWC's objectives is to gain greater influence over economic policy
The central concern of one of the federations participating in the PWC,
the All Pakistan Federation of Trade Unions, is the privatization of the
power generation and distribution system (WAPDA). Union leaders claim that
the nation will be "plunged into darkness" if WAPDA is privatized as thousands
of villages are not profit-making sites of operation (Dawn 1995). The Hydro
Electric Central Labour Union has met with Ministers of the National and
Provincial Assemblies to give publicity to the estimate made by a former
Finance Minister that privatization of the power sector would add US$330
million to the burden of power consumers annually. The electricity workers
union has also fought the privatization of Pakistan's power sector in the
courts and protested the privatization plan in the streets (Ahmed 1995).
One of the most significant decisions of the PWC is an agreement not
to compete between each other in CBA elections. Pakistani federations calculate
that to strengthen themselves they must overcome the divisive logic of
factory level competition. Inter-union solidarity drawn from the plant
level promises to have considerable national influence.
New Pakistan trade union strategies have also involved greater emphasis
on workers' education. The Pakistan Institute of Labour Education and Research
(PILER) has been organizing workers education programs since the early
1980s. Trade unionists from all major Pakistani federations participate
in the programs, which are "aimed at enhancing the social and political
awareness" of shop-floor level trade union leaders (MLF 1992). Plant-level
trade union leaders learn about human rights, labour law, public interest
litigation, the environment, economics, and patriarchy (PILER 1989).
Another strength of Pakistani unionism, derived in part from its independence
from political parties, is cooperation with non-governmental organizations
involved in environmental protection. When the private company Dansk Sojakagefabrik
(DS) sold an outlawed chlor-alkali plant to the Pakistani company Ravi
Alkalis for installation in Karachi, Pakistani non-governmental organizations
(NGOs), including the PWC, successfully blocked the deal. Together with
Greenpeace International, the Pakistani NGOs and trade unions in the Confederation
threatened to prevent the unloading at the Karachi Port. The plant which
uses mercury cell technology, the most polluting of the three available
chlor-alkali production technologies, had been banned from operating in
Denmark on account of workers' health problems (Sarwar 1994).
Trade Union Democracy
The response of trade unionists and labour activists to international
economic integration and to more informal labour practices is tempered
differently by the political regimes under which labour institutions form.
But Indian and Pakistani labour institutions are not replicas of the political
regimes that structured them. The Pakistani military imposed regular factory-level,
secret-ballot elections upon labour's organizations while Indian democracy
promoted top-down, political party control of labour's organizations. It
may appear somewhat ironic that an authoritarian regime would institute
workplace elections, whereas a democratic regime would promote statism
and bureaucracy. The success of the privatization measures in Pakistan,
however, suggest that regular elections are an important mechanism for
the depoliticization of the trade union movement. The absence of a system
by which workers may select their trade union representatives provides
Indian political parties with opportunities to mobilize labourers and politicize
This is not always in the interest of workers. Pakistan's industrial
restructuring and privatization program, which has gone further than India's,
has involved less labour unrest and better compensation packages in part
because employers are able to negotiate with legally recognized, workplace
elected trade unions officials (Cf. Candland 1996). In India, disagreements
between the trade unions and the government have prevented the adoption
of an explicit mechanism for trade union recognition. Just as there is
no mechanism for the recognition of national trade union in India, there
is no legal mechanism for trade union recognition at the factory-level,
other than its affiliation with a political party. As early as 1968, the
National Commission of Labour, recommended that minimum national membership
levels be achieved to acquire consultative status. The recommendation was
largely ignored until the early 1980s (Datar 1983: 6-7). Trade union recognition
in all but three states is based upon a check-off system. Trade unions
claim members, labour officials verify these claims, and workers are presented
with the results. The absence of elections or other explicit criteria for
trade union recognition arguably invites political party manipulation into
Indian unionism. A system for the recognition of trade unions by employers
was devised by Parliament in 1946. It is widely suspected that this system
is not used because it would expose the unrepresentative character of Indias
national trade union centers, as when a government verification showed
grossly inflated membership claims in 1980 (Datar 1983: 11) and again in
1995. Recently, the major trade union centers, with the significant exception
of INTUC, have expressed supported for secret ballot elections, even though
such a mechanism for trade union recognition is likely to reduce their
membership and their standing in state and central government consultations.
Political unionism has not outlived its usefulness. In South Asia, the
social demand for labour to act politically is at a historical high. Trade
union response to the limitations of conventional political unionism is
not to become apolitical. Given the ability of informal means of production
to disorganize workers, the political challenges to organized labour are
higher than ever. Methods for effective collective action in India and
Pakistan involve more democratic means of decision-making, increased efforts
trade union and federation cooperation and mergers, and programs to develop
the technical economic and accounting skills with which to better negotiate
rehabilitation packages with management, government agencies, and financial
institutions. As organized labour in both countries now seeks to transform
itself, it is developing a new social element to the political work as
well as a new political orientation.
This comparative analysis of Indian and Pakistan trade union development
and response to new economic realities demonstrates that the structure
of labour institutions in late industrializing economies, although neglected
by economic development theory, is a critical determinant of macroeconomic
performance. Some of the new models in economics involve the division of
labour, human resource investment, education and training, and learning
by doing (Boyer 1995: 27). Still, much conventional economic theory, including
contemporary `classical' macroeconomic theory, assume the existence of
perfect (i.e., institution-less) labour markets, a condition nowhere in
evidence and impossible to imagine without the complete commodification
of labour. Worldwide, societies may be at the dawn of a new industrial
revolution, a new phase of the commodification of labour. But labour, as
Polanyi (1944) recognized, can not be completely commodified. Labour will
always resist, always struggle to preserve itself against the merely economic.
How labour resists will differ according to the institutional legacy of
past political regimes, but trade unionists in both India and Pakistan
are making efforts toward greater democratization and decentralization
as other labour activists are working to achieve greater organizational
capacity and more effective political influence.
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